Recently, the cryptocurrency market experienced a slowdown that took out $120 billion from the total market cap in a single day. This obviously caused panic throughout the market, which led to a sell-off from investors who were trying to save themselves from further losses. However, more than 110,000 traders recorded hundreds of millions of dollars in losses as the downtrend triggered back-to-back liquidation.
Traders lose $430 million
Crypto market record One of the biggest liquidation events of 2022. On Thursday, Bitcoin plunged below $37,000 after news of a 50 basis point interest rate increase at the just-concluded Federal Open Market Committee meeting. This will be the start of a long day for cryptocurrency traders who have seen their trades liquidated into hundreds of millions of dollars.
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Essentially, the liquidations were long-running liquidations from traders who placed their bets on the optimistic future price of various cryptocurrencies. The market will continue to fall and liquidations will continue to leave ripples in the market. In total, there have been more than $430 million in liquidation in the last 24 hours alone.
Crypto liqudaitions surpass $430 million | Source: Coinglass
Naturally, bitcoin led the market through liquidations. The leading cryptocurrency favored by traders for being the market leader has seen traders liquidate over $200 million within a single day. Long liquidations accounted for about 70% although short traders were not excluded from the attack.
On the altcoin front, Ethereum led the group with $69 million in liquidations. However, there were some other important players in the field who watched traders fall behind expectations.
GMT and APE, two currencies that have been on the rise lately have seen liquidations of more than $12 million respectively. Some would argue that they saw APE’s liquidation coming due to the uproar that followed billionaire Elon Musk changing his Twitter profile picture to BAYC’s avatar.
Crypto market cap loses $120B | Source: Crypto Total Market Cap on TradingView.com
However, the market remains a sad day. Feelings have now fallen into the zone of extreme fear Which leads to incredibly low momentum in the market. Even more important is the fact that Bitcoin is now falling dangerously low at the $36,000-$38,000 support level.
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This point remains crucial for the bulls to hold the digital asset above, as a dip below $36,000 is likely to put the digital asset on a path below $30K. If this happens, Bitcoin being a market leader will certainly pull the rest of the market down with it, which could see prolonged liquidations of historic proportions rock the market.
Featured image from Physics World, chart from TradingView.com